Obama wants to expand Medicaid while Romney wants to replace it

The outcome of the presidential race will have a profound effect on the health care of millions of Floridians — but not because of the candidates’ differences over Medicare.

Instead, more than 3 million people in Florida — from infants to the elderly — who get their health care under another program, Medicaid, will be affected in different ways depending on whether President Barack Obama is re-elected or voters choose Mitt Romney.

About 16 percent of people in Florida receive health care under Medicaid, the federal-state program for the poor and disabled. More than one-quarter of Florida’s children, half of all baby deliveries and 63 percent of nursing home days in the state are covered by the program.

Significant attention in the campaign has focused on how best to preserve Medicare, the federal health care program for people 65 and over. But Obama and Romney are also pushing widely divergent plans for Medicaid.

Obama wants to expand Medicaid as a key component of his Affordable Care Act, providing care to more people by raising the eligibility limits. Romney, who wants to repeal the health care law, has advocated converting Medicaid into a grant program that would give states much more flexibility in deciding who should be covered by the system.

Like other proponents of this approach, Romney says the grant system will let federal and state governments better control rising costs.

State leaders across the country have balked at the rising bite that Medicaid takes out of their budgets, especially after the Great Recession and plummeting tax revenues have forced numerous cutbacks. Florida’s Medicaid costs alone have more than doubled since 2001, with more than 1 million more people joining the state’s programs since 2007.

Among other measures, Florida has tested and is pushing for approval to expand statewide a managed care program to rein in costs.

But critics warn that the block grant approach — which would essentially cap costs with a factor for inflation and population — would result in deep cuts in services, affecting vulnerable Floridians ranging from children in families struggling with little income to frail seniors in nursing homes.

A study last month by the Kaiser Family Foundation shows Florida could lose as much as $33.3 billion over the first 10 years of a block grant program — based on a plan passed by the U.S. House and back by Romney’s running mate, U.S. Rep. Paul Ryan, R-Wisconsin. Nationwide, the block grant program would cut Medicaid spending by $810 billion in the same period.

The 3.3 million Floridians covered by Medicaid include more than 705,000 children living in families that earn less than the federal poverty level — $19,000 for a family of three. It includes more than 1 million Floridians in the Temporary Assistance for Needy Families program. And it covers 629,000 disabled children, adults and seniors who qualify for Social Security’s supplemental security income program.

The cost and the number of Floridians who rely on Medicaid have surged in recent years because of the recession. In 2005, the program covered some 2.2 million Floridians at a cost of $13.8 billion. After the recession started, Medicaid added more than a million Floridians, with the cost growing to $22 billion this year.

States like Florida have been hit by a double whammy as they’ve had to cut their budgets in a sagging economy while costs for health care and a growing elderly population go up.

Gov. Rick Scott and many other conservatives say the growth is unsustainable, although the federal government pays about 56 percent of the costs with the state picking up the remainder. He said the program’s growth diminishes the state’s ability to provide more funding for education and other state priorities. Block grants offer a way to curb the cost of Medicaid while still providing care for some of the state’s neediest citizens, he said.

Under a block grant program, states would receive a lump sum for Medicaid with adjustments for inflation and population growth.

At the same time, the states would be largely free to decide how to spend the money, compared with the current system in which there are a variety of mandates and restrictions on care to be provided and payments to doctors and other providers.

“We’ve got to be able to figure how to create the right safety net because we all want to have a safety net for those who can’t afford health insurance, but we’ve got to be able to afford it,” Scott said.

“If we could have a block grant, we would decide how we would spend those dollars and who we would cover and what type of services we would provide,” said Scott, a former hospital company executive. “I think we would provide a better service for those who can’t afford health insurance on their own.”

According to the conservative Heritage Foundation, which supports the House plan, more Medicaid recipients should be moved into the private market so families have “more control over their health care.”

“Without change, Medicaid will only worsen, with unsustainable spending that crowds out other national and state priorities and poorer access to care for those in need,” the organization reported.

Critics, including many Democrats, say they fear such a radical change will ultimately mean less care for some of Florida’s most vulnerable citizens.

State Sen. Nan Rich, D-Weston, a key member of the Senate panel that oversees Medicaid spending in Florida, said converting the program to a grant system will likely result in the elimination of critical services for some of Florida’s neediest residents.

“I just think it would be devastating for Medicaid recipients all over our state,” Rich said.

Rich said she already strongly disagrees with Scott’s position not to expand Medicaid coverage under the new federal health care law to 138 percent of the federal poverty level — which is $26,344 a year for a family of three in 2012. She said that will mean the loss of some $20 billion in federal funding for the state over the next decade, noting the federal government will initially pick up 100 percent of the expansion cost.

A U.S. Supreme Court ruling this summer gave the states the ability to opt out of the expansion, which Scott supports.

Additionally, Rich said she fears that converting Medicaid to a block grant program will allow Republican lawmakers to eliminate many of the so-called “optional” Medicaid programs, which they have tried to target over the years.

They include such initiatives as the Medically Needy program, which covers some 54,000 Floridians who have catastrophic illnesses but are not poor enough to qualify for Medicaid. Other optional services that have been targeted for cuts in recent years include dental, hearing and vision services for adults, hospice care, chiropractic services and the Medicaid Aged and Disabled program.

Rich said there needs to be a “baseline” of minimum services in a block grant program.

“You just can’t turn it all over to the states,” she said. “Florida doesn’t have a very good track record.”

Critics also say Florida hospitals and nursing homes would be hit by any major reductions resulting from a Medicaid block grant program.

The Obama campaign launched a television ad in October warning that Romney’s Medicaid plan could cut the program by a third and burden “families with the cost of nursing home care.”

The Kaiser study showed Florida hospitals could lose $19 billion over the next decade from a block grant proposal similar to the U.S. House’s plan and nursing homes would lose $10.7 billion.

Nearly one-third of Florida’s Medicaid expenses are for long-term care, including nursing homes. The Kaiser study concluded that a block grant program would either result in fewer people being covered or less money being spent per person. The result could be fewer nursing home beds available for Medicaid patients, meaning it would be harder to find a nursing home without patients paying from their own pockets.

But Scott and other supporters of the block grant approach insist that critical services can be maintained while bringing the rising cost of Medicaid under control.

Scott said the state knows who needs to be covered and what services should be provided. He said the block grants would allow the states to do that in an “accountable” way.

“I think we would do a better job without all of the restrictions that the federal government has,” he said.

THE CHOICEA look at President Barack Obama’s and Republican challenger Mitt Romney’s plans for Medicaid, the federal-state health care program for the poor and disabled.

BARACK OBAMA• Would expand Medicaid coverage under the Affordable Care Act to cover families up to 138 percent of the federal poverty level — $26,344 for a family of three.
• Proponents say the Medicaid expansion is a key component of the federal health care law’s aim to reduce the number of Americans who are uninsured.
• Critics say the expansion puts increasing financial strains on the federal and state government budgets, adding to the federal deficit and limiting the states’ ability to fund other programs, such as schools.

MITT ROMNEY• Would repeal the Affordable Care Act, which includes the Medicaid expansion.
• Would convert Medicaid, which is currently an open-ended entitlement program, to a block grant, which would give each state a lump sum pegged to inflation and population growth.
• Proponents say the plan would give states more flexibility in deciding how to provide Medicaid services, while also setting financial limits for the program.
• Opponents say they fear the block grants will lead to dramatic reductions in critical health care services for the poor, including nursing home coverage and prescription drugs.

BY THE NUMBERSMedicaid recipients by county as of Sept. 30:
43,409: Sarasota
48,010: Manatee
20,124: Charlotte
The total in Florida: more than 3 million

Lloyd Dunkelberger

Lloyd Dunkelberger is the Htpolitics.com Capital Bureau Chief.
He can be reached by email or call 850 556-3542.
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Last modified: November 2, 2012
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